Experian News Blog » Economic Trendshttp://www.experian.com/blogs/news
News & Public PolicyTue, 03 Mar 2015 17:25:45 +0000en-UShourly1http://wordpress.org/?v=4.12014 Trends Lead to Promising Economic Outlook This Yearhttp://feedproxy.google.com/~r/economic-trends/~3/XnbVwQ84cKs/
http://www.experian.com/blogs/news/2015/01/19/2014-trends/#commentsMon, 19 Jan 2015 18:24:41 +0000http://www.experian.com/blogs/news/?p=7877
2014 was an eventful year: Republicans regained control of both the House and Senate in sweeping fashion, the European economy constricted dramatically, Russian economic sanctions brought the country to the brink of default, and China surpassed the United States as the world’s largest economy. And those are just a few of the year’s macro highlights.
Yet despite this tumultuous time, the United States continued to demonstrate positive economic trends. As we look ahead, precarious global events and international uncertainties continue to raise some alarms, but domestic economic fundamentals appear strong enough to withstand external shock. In general, the U.S. economic recovery is on track to evolve into a full-fledged expansion.]]>

2014 was an eventful year: Republicans regained control of both the House and Senate in sweeping fashion, the European economy constricted dramatically, Russian economic sanctions brought the country to the brink of default, and China surpassed the United States as the world’s largest economy. And those are just a few of the year’s macro highlights.

Yet despite this tumultuous time, the United States continued to demonstrate positive economic trends. As we look ahead, precarious global events and international uncertainties continue to raise some alarms, but domestic economic fundamentals appear strong enough to withstand external shock. In general, the U.S. economic recovery is on track to evolve into a full-fledged expansion.

Business and Consumer Credit Conditions at Recovery Highs
The American economy closed the 2014 books on a very different note than it started. Tough conditions last January and February had analysts, business owners and consumers questioning the economic progress of late 2013. Fortunately – with the subsiding of last year’s unusually harsh winter weather – employment, revenue, consumer spending and credit conditions all rebounded exceptionally. These events were particularly positive for small businesses in America, as witnessed by the following trends.

Small business credit

After years of difficulty obtaining credit, the small business credit spigot is reopening – outstanding credit balances grew by nearly 5 percent and are up 1.9 percent from a year ago.

In the third quarter, small business credit conditions improved significantly, according to the Experian/Moody’s Analytics Small Business Credit Index. Nearly 12 percent fewer businesses filed for bankruptcy, and the share of credit balances being paid late fell to 8.8 percent – the lowest level ever tracked.

The net share of small businesses that plan on raising employee compensation over the next three to six months is at a recovery high, and Moody’s Analytics expects the United States to reach full employment by the end of 2016.

Consumer credit trends
Positive consumer spending and credit trends are therefore beginning to emerge; the national average VantageScore rose two points over 2013. Some consumer highlights:

Bankcards on the rise: Overall, the nation’s credit scores are up and bankcard and retail card lending is growing, according to Experian’s State of Credit report. Specifically, the number of bankcards per consumer rose 4.2 percent from 2013, and the number of retail cards rose 6.7 percent, according to Experian.

Consumer comfort zone for loans is back: Consumers are increasingly becoming comfortable taking out loans to purchase big-ticket items. Use of home-equity lines of credit grew amid a resurging housing market in 2014, and delinquency rates remained steady. New loan originations throughout the year totaled $120 billion—up 27 percent from the previous year. This growth trend is expected to continue through this spring and summer’s buying season.

Auto loans and higher education benefit from recovery: Car and student loans are also seeing a rise. Open auto loan balances reached an all-time high, with the majority of loans/balances in the super prime credit range. And in an analysis of student loan trends since the 2008 recession up through 2014, Experian found that student loans increased by 84 percent, surpassing home equity loans/lines of credit, credit card and automotive debt.

Cross-Channel Marketing Remains Strong
With the explosion of smartphones and digital tablets, marketers are seizing opportunities to reach key audiences in new ways, further strengthening America’s economy. Last year, 80 percent of marketers planned to run cross-channel marketing campaigns, and more than half planned to integrate their marketing campaigns across four or more different channels, according to Experian Marketing Services’ Digital Marketer Report. This fuels the economy by increasing the likelihood that consumers will make a purchase, as marketers can tailor offers to consumers’ specific needs.

At the same time, it creates a strong need for data solutions to help marketers efficiently target their efforts. Ninety-three percent of companies have some sort of data-quality solution in place, Experian Data Quality found, but very few are calculating the return on this investment. Looking ahead, these businesses will need to calculate the return on their investments to document the economic value to their business – and we believe the outlook is strong for cross-channel marketing to continue to infuse energy into the American economy.

Credit Uncertainties: Improved Housing and Consumer Spending Critical
Many of 2014’s big uncertainties were resolved after the first few months of the year. Initial stagnation turned out to be the result of inclement weather, and the delay of the Affordable Care Act’s employer mandate for small businesses allowed companies more time to prepare for greater employee health costs. But domestic uncertainties remain.

Given their deep roots in the U.S. economy, consumer spending and the housing market will need to continue to pick up to successfully accelerate growth throughout 2015. Small businesses depend heavily on consumer spending to operate, and while household finances are trending at recovery highs amid stronger hiring and lower unemployment, compensation and hours worked actually fell last fall.

At the same time, the housing market recovery is still not broad-based, leaving the construction industry in flux and certain regions lagging in growth. In New England, the market has remained stagnant, and in Florida and Illinois, where the housing crash was disproportionately detrimental, key industries such as construction are among the worst in the country. Meanwhile, in the Mountain and Western regions, population and job growth in lucrative fields have driven a housing boom and healthy credit economy.

Future Outlook
Despite pockets of stagnation and global challenges, the U.S. economy is poised to see a full-fledged expansion in 2015. As the labor market tightens, employers will raise compensation, freeing up discretionary consumer spending that will prove critical to sustained economic growth.

All told, expect upward trends in the economy to continue as 2015 swings into high gear.

Lloyd Parker is Group President, Credit Services for Experian North America. He leads the sales and service teams for Experian’s Credit Services & Decision Analytics businesses.

]]>http://www.experian.com/blogs/news/2015/01/19/2014-trends/feed/0http://www.experian.com/blogs/news/2015/01/19/2014-trends/State of Credit 2014http://feedproxy.google.com/~r/economic-trends/~3/6uu1NnAUooM/
http://www.experian.com/blogs/news/2014/11/18/state-of-credit-2014/#commentsTue, 18 Nov 2014 21:49:42 +0000http://www.experian.com/blogs/news/?p=7359Experian unveiled its fifth annual State of Credit report today, which provides a snapshot of consumers’ credit scores broken out nationally and by local market.

This year’s findings show that the nation’s average VantageScore has improved by two points since last year, coming in at 666. In the city listings, Mankato, MN takes the top spot with a VantageScore of 706 and Greenwood, MS residents have the lowest score of 609 in the study. While the report gives residents of certain cities reason to celebrate their higher scores, the study isn’t meant make the lower cities sing the blues. These types of data-driven insights are meant to help consumers — to give them a reason to be interested in credit, to want to understand and improve their financial well-being, and to become a more savvy credit user and manager.

The study this year not only provides the nation’s credit scores, but also touches on some trends that show lenders and borrowers may both be feeling more confident as the economy is picking up. According to the research, people are carrying more credit cards than last year — both bankcards and retail cards. The average number of bankcards per person is 2.18 and the average number of retail cards per person is 1.54.

The nation’s average debt is also on the rise, coming in at $28,496 per person, which is an increase of 2.3 percent. While more cards and more debt may sound like a dangerous combination, if bills are being paid on time and the credit is being managed well, there’s nothing to be scared of … even with that national credit score of 666.

Is the home refinancing boom over?“Home lending had an incredible two-year period from Q2 2011 to Q2 2013, with $4 trillion in mortgage origination volume; 71 percent of that, or $2.9 trillion, came from home refinancing,” said Linda Haran, senior director of product management and strategy for Experian Decision Analytics. “A look behind those numbers tells us that the total dollars originated over the past four quarters are about $1.3 trillion versus $1.8 trillion, showing a 30 percent decrease in annual origination volumes from the refinancing boom.”

“However, those last four quarters show us that the mix of purchase-to-refinance volume has shifted to a fifty-fifty split between refinance and purchase volume activity. This equates to new purchase activity increasing by 22 percent in Q2 2014 from last year, signaling that consumers are getting back into the market. In the long term, this appears to set up the market for continued purchases into spring and summer of 2015.”

HELOC lending growth seen across all regionsDouble digit growth was seen in all regions compared to the numbers reported one year ago. The two regions that led the trend in increasing HELOC origination volumes were the West Coast and the Northeast — with 27 percent and 15 percent year-over-year growth, respectively. California accounted for the highest volume of HELOC dollars originated in Q2 with $5.9 billion, followed by New York with $2.2 billion and Pennsylvania with $2.0 billion.

About the dataThe data for this insight and analysis was provided by Experian’s IntelliViewSMproduct. IntelliView data is sourced from the information that supports the Experian–Oliver Wyman Market Intelligence Reports and is accessed easily through an intuitive, online graphical user interface, which enables financial professionals to extract key findings from the data and integrate them into their business strategies. This unique data asset does this by delivering market intelligence on consumer credit behavior within specific lending categories and geographic regions.

]]>http://www.experian.com/blogs/news/2014/09/29/da_eow_q22014/feed/0http://www.experian.com/blogs/news/2014/09/29/da_eow_q22014/Driving with the top down? You’re probably highly educated and very successfulhttp://feedproxy.google.com/~r/economic-trends/~3/WNh-RXqZ3JU/
http://www.experian.com/blogs/news/2014/07/25/top-down/#commentsFri, 25 Jul 2014 23:10:36 +0000http://www.experian.com/blogs/news/?p=5770
Summertime only comes around but once a year. And when it does, you can always expect to see the sun shining brightly, kids eating ice cream and folks heading to the beach.
While all these may be staples of the season, none are more indicative of summer than seeing someone drive down the highway in a nice convertible with the wind blowing through their hair.
]]>

Summertime only comes around but once a year. And when it does, you can always expect to see the sun shining brightly, kids eating ice cream and folks heading to the beach.

While all these may be staples of the season, none are more indicative of summer than seeing someone drive down the highway in a nice convertible with the wind blowing through their hair.

Who gets to live this lifestyle, you ask?

The answer: Successful, college-educated consumers living in California or Florida.

According to a recent analysis, Experian Automotive found that more than 50 percent of all convertible car buyers had at least a bachelor’s degree, while only 38.2 percent of average new car buyers had a similar education level. Additionally, nearly 19 percent of consumers purchasing a convertible had an average household income in excess of $175,000, and 11.7 percent owned a home valued at more than $1 million. Conversely, only 10.7 percent of average new car buyers had a household income of the same level, and only 4.4 percent owned at home valued at the same price.

The analysis also showed that a significant portion of convertibles were registered in predominately sun-filled states. In Q1 2014, 23 percent of all convertibles were registered in California (13.4 percent) or Florida (9.6 percent). Texas (7 percent), New York (4.3 percent) and Illinois (3.9 percent) rounded out the top five.

And, now that you have an idea of who the person driving the convertible is, you probably also noticed that they were most likely driving a Ford Mustang. The analysis found that in the first quarter of 2014, the Ford Mustang was the convertible vehicle model of choice across all 50 states. The Chrysler Sebring, Mazda Miata/MX-5, BMW 3-Series and Chevrolet Corvette rounded out the remaining top five convertible makes and models in the United States.

]]>http://www.experian.com/blogs/news/2014/07/25/top-down/feed/0http://www.experian.com/blogs/news/2014/07/25/top-down/Big cities, big debt? [Infographic]http://feedproxy.google.com/~r/economic-trends/~3/48FKMv8seMA/
http://www.experian.com/blogs/news/2014/05/01/big-cities-big-debt-infographic/#commentsThu, 01 May 2014 21:33:00 +0000http://www.experian.com/blogs/news/?p=4874Debt is often thought of as a scary word and many spend their lives trying to avoid it at all costs. Understanding what credit is, why you need it and how to build it can help make it less frightening and can actually put you in control. Debt doesn’t have to be a four-letter word.

To wrap up Financial Literacy Month, Experian released a study this week that takes an in depth look at debt and credit scores in the 20 largest cities across the U.S. and compares the numbers to where these cities were four years ago. The findings show that Detroit residents have the least amount of debt, while the residents of Dallas have the most.

From a national perspective, debt has increased by 5 percent and in 19 of the 20 cities studied, average debt has increased, which actually signals a positive trend. How is that possible, you ask? Well, the analysis showed that with the increases, these large cities are actually managing the debt they have quite well, and that credit lending is opening up.

REMEMBER: Credit is a tool that if managed correctly can be a positive – the key is not to misuse the credit you have.

Take a look at the map below to see how these large cities fared, and visit www.livecreditsmart.com to read more about the study and how you can make better financial decisions and be more aware of where you stand from a credit perspective. In today’s changing economy, it’s more important than ever to take control of your credit and live credit smart no matter where you live.

See the map below and view the news release for more information on this study.

“Overall from 2013 we saw a strong steady improvement in the economy similar to our 2012 year-end review. Consumer confidence increased as they continue to be resilient during the ongoing recovery,” said Linda Haran, senior director of product management and strategy for Experian Decision Analytics. “While overall consumer debt increased 6 percent, it was not heavily weighted in one particular VantageScore segment. Debt increases occurred across all VantageScore consumer segments equating to a balanced distribution of increases in total debt year-over-year. That represents smarter spending among all consumers.”

“Other positive indicators coming out of 2013 include bankruptcies declining 12 percent from 2012 and consumer delinquency trends continuing to decrease. Home Equity originations realized strong growth in 2013, exceeding 2009 levels as new lending was up 42 percent in Q4 2013 over the same period a year ago.”

About the data
The data for this insight and analysis was provided by Experian’s IntelliViewSM product. IntelliView data is sourced from the information that supports the Experian–Oliver Wyman Market Intelligence Reports and is easily accessed through an intuitive, online graphical user interface, which enables financial professionals to extract key findings from the data and integrate them into their business strategies. This unique data asset does this by delivering market intelligence on consumer credit behavior within specific lending categories and geographic regions.

]]>http://www.experian.com/blogs/news/2014/04/29/2013-q4-experian-oliverwyman/feed/0http://www.experian.com/blogs/news/2014/04/29/2013-q4-experian-oliverwyman/Improved housing market doesn’t lead to improved business credit within construction industryhttp://feedproxy.google.com/~r/economic-trends/~3/ca1iIl3g_bM/
http://www.experian.com/blogs/news/2014/03/11/improved-housing-market-doesnt-lead-to-improved-business-credit-within-construction-industry/#commentsTue, 11 Mar 2014 17:57:49 +0000http://www.experian.com/blogs/news/?p=4678Q4 Metro Business Pulse analysis all the more intriguing. Although the housing market is showing signs of improvement, the construction industry continues to struggle with below-average business credit health, including a lower-than-average risk score, paying their bills more days beyond contracted terms, had higher bankruptcy rates and had a greater percentage of delinquent debt than other industries.]]>As a child, one of the things we all learn is cause and effect. If someone is hungry, then they eat food. If someone is tired, then they take a nap. So logically, one can infer that since we are seeing a recovering housing market, more people will want to buy houses, thus creating a need for more homes to be built.

But that’s what makes the findings from Experian’s Q4 Metro Business Pulse analysis all the more intriguing. Although the housing market is showing signs of improvement, the construction industry continues to struggle with below-average business credit health, including a lower-than-average risk score, paying their bills more days beyond contracted terms, had higher bankruptcy rates and had a greater percentage of delinquent debt than other industries.

However, despite the direction of the industry as a whole, there were pockets of progress, especially in areas hit hardest by the housing collapse. For instance, construction businesses in Phoenix, Ariz. had among the lowest delinquency rates across the industry (lower than approximately two-thirds of the industry).

Not so surprisingly though, other areas hit hardest by the housing bust were not as successful. Areas such as, Las Vegas, Nev., Miami, Fla., Fort Myers, Fla., and Orlando, Fla., all continued to struggle across most business credit health categories. In addition to having lower-than-average risk scores and high delinquency rates, the collective grouping paid their bills the most days past due, totaling roughly 92 days beyond contracted terms.

To see detailed findings from the report, as well as other business credit trends seen throughout the quarter, register for Experian’s Quarterly Business Credit Review Webinar on March 18, 2014, at 1 p.m. Eastern time.

]]>http://www.experian.com/blogs/news/2014/03/11/improved-housing-market-doesnt-lead-to-improved-business-credit-within-construction-industry/feed/0http://www.experian.com/blogs/news/2014/03/11/improved-housing-market-doesnt-lead-to-improved-business-credit-within-construction-industry/Car and home buyers underestimate the impact of identity fraud on securing a good interest rate, survey revealshttp://feedproxy.google.com/~r/economic-trends/~3/-O3fPEKq09k/
http://www.experian.com/blogs/news/2014/02/25/car-and-home-buyers/#commentsTue, 25 Feb 2014 23:20:10 +0000http://www.experian.com/blogs/news/?p=4636Most consumers (89 percent) agree that credit plays an important role when buying a home or a car but only 73 percent recognize that identity fraud could affect their ability to get loans with favorable interest rates, according to a new survey from Experian Consumer Services.

In addition, more than half of big-ticket purchasers fail to check their credit at any point in the buying process, which leads to surprises when it comes time to close the deal.

“Identity fraud is real and affects consumers at very important times of life,” said Ken Chaplin, senior vice president of marketing for Experian Consumer Services.

“In today’s environment, it’s especially important that consumers check their credit regularly to spot signs of fraud, understand better what affects their credit and make decisions that will help them be in the best position possible when it comes time to buy their dream home or car.”

The key highlights of the research include:

Many consumers live credit confident: Eighty-two percent of consumers report they feel confident about their credit status — only 14 percent say they worry their credit status might hurt their ability to make a home or vehicle purchase

Credit affects when and what people buy: Sixteen percent of respondents delay purchasing a vehicle or home in order to improve their credit — 13 percent would purchase a more expensive car or home if they had better credit

Checking credit plays a part in the buying process: Sixty percent of home buyers and 25 percent of car buyers check their credit as part of the purchase process

For those that check their credit:

Thirteen percent were surprised by their credit scores

Thirty-six percent said their credit scores were higher than expected

Eleven percent report their credit scores were lower than expected

Eleven percent found something negative on their credit report that they did not know about

Consumers can learn more by visiting Experian.com and watching the most recent commercials from Experian Consumer Services about how they can live credit confident™ when buying a car or securing a home loan.

Survey methodology
The data points referenced above come from a study commissioned by ConsumerInfo.com® Inc., an Experian company, produced by research firm Edelman Berland and conducted as an online survey of 500 car and home buyers (250 car buyers, 250 home buyers). Buyers were defined as adults who had purchased within the past year or plan to purchase in the next year. Interviewing took place from January 27–30, 2014. The margin of error is plus or minus 4.4 percent.
Experian

]]>http://www.experian.com/blogs/news/2014/02/25/car-and-home-buyers/feed/0http://www.experian.com/blogs/news/2014/02/25/car-and-home-buyers/A holiday gift from the automotive credit world – interest rates at an all-time lowhttp://feedproxy.google.com/~r/economic-trends/~3/Sr41UhP3NEY/
http://www.experian.com/blogs/news/2013/12/09/a-holiday-gift-from-the-automotive-credit-world-interest-rates-at-an-all-time-low/#commentsMon, 09 Dec 2013 19:03:42 +0000http://www.experian.com/blogs/news/?p=4185
With less than a month left in the year, what does your to-do list look like? Finish holiday shopping? Jotting down your resolutions for the new year? Or perhaps you plan on heading down to the car dealership to take advantage of the great end of year sale offers. If it’s the latter of the three, you might just be in luck, because it’s a very good time to purchase a new vehicle.
According to Experian Automotive’s Q3 State of Automotive Finance Market report, the average interest rate for a new vehicle loan hit 4.27 percent, down from 4.53 percent a year ago. This marks the lowest rate we have seen, since Experian began publicly reporting the data in 2008.]]>

With less than a month left in the year, what does your to-do list look like? Finish holiday shopping? Jotting down your resolutions for the new year? Or perhaps you plan on heading down to the car dealership to take advantage of the great end of year sale offers. If it’s the latter of the three, you might just be in luck, because it’s a very good time to purchase a new vehicle.

According to Experian Automotive’s Q3 State of Automotive Finance Market report, the average interest rate for a new vehicle loan hit 4.27 percent, down from 4.53 percent a year ago. This marks the lowest rate we have seen, since Experian began publicly reporting the data in 2008.

The good news doesn’t stop there. Lower interest rates have also given car shoppers the ability to keep payments down when taking out a larger loan. Just as interest rates for new vehicles have hit the lowest point since 2008, the average amount financed has reached its highest point. In Q3, consumers purchasing a new vehicle took out an average loan of $26,719, approximately $750 more than the previous year.

Another way we have seen consumers keeping those monthly payments low is by taking out slightly longer loans. The average loan term for a new vehicle was 65 months in Q3, up one month from Q3 2012. This coupled with low interest rates have kept the average monthly payment for a new vehicle relatively flat, only up $6 from last year.

Other findings from the report include:
• Leasing accounted for 27.22 percent of all new vehicle financing in Q3, up 24.40 percent last year
• The average monthly lease payment was $404 in Q3, down from $409 in Q3 2012
• The average credit score for a new vehicle loan dropped to 753 in Q3 2013 from 755 in Q3 2012
• The average credit score for a used vehicle remained flat year-over-year at 668
• Average monthly payments for used vehicles remained flat at $350

]]>http://www.experian.com/blogs/news/2013/12/09/a-holiday-gift-from-the-automotive-credit-world-interest-rates-at-an-all-time-low/feed/0http://www.experian.com/blogs/news/2013/12/09/a-holiday-gift-from-the-automotive-credit-world-interest-rates-at-an-all-time-low/National credit default rates hit post-recession low in June 2013http://feedproxy.google.com/~r/economic-trends/~3/Mvy_noe2AG0/
http://www.experian.com/blogs/news/2013/07/19/national-credit-default-rates-hit-post-recession-low-in-june-2013/#commentsFri, 19 Jul 2013 21:02:04 +0000http://www.experian.com/blogs/news/?p=3246The past several years have been somewhat of an uphill climb for our country’s economy and this has impacted the default rates for consumer credit. However, now that we’re out of the recession, consumers are managing their credit back to pre-recession levels.

In June 2013, the S&P/Experian Consumer Credit Default Indices, a monthly comprehensive measure of changes in consumer credit defaults, showed that default rates have fallen at a national level, as well as, in all four major buckets it tracks including, bankcard, auto, first mortgage and second mortgage. Additionally, the national composite and first mortgage defaults rates hit new post-recession lows at 1.34 percent and 1.23 percent, respectively.

Also, two of the five cities the indices focus on, New York and Miami, both saw decreases in default rates during the month. The other three cities, Chicago, Dallas and Los Angeles all saw marginal increases in June. However, all five cities remain below their levels a year ago.